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Members,
In this version of The Standard, we provide several pertinent updates from New Mexico, Texas, and the Federal level. Our team has been hard at work advocating for the oil and gas industry in the Permian and your input and participation are highly appreciated.
Below you will find a recap of our 61st Annual Meeting, an update on Rule 8/Chapter 4 out of Texas, official comments PBPA submitted this week, and other important information. As always, we also provide details on upcoming PBPA events and other relevant community activities:
Important Updates
- RECAP: 2023 Annual Meeting
- In Memoriam: Mr. Mack C. Chase
- PFAS in New Mexico
- Atencio v. New Mexico
- Proposed Revisions to the New Mexico Oil and Gas Act
- Rule 8/ Chapter 4
- PBPA's Legal Action regarding the LPC
- Proposed GHGRP Revisions Update
- Proposed Listing of the DSL Update
- 2023 Top Hand Award Recipient
- Q3 New Members
- Committee Meetings
Community Events
- Midland College PPDC Training Courses
- PRSC Luncheon
- SPE Hiring Event
- Energy Law/CLE Symposium
- West Texas Oil & Gas Job Fair
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Additional events can be found on the calendar in the Member-Only Center!
Regards,
Ben Shepperd
PBPA President
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RECAP: 61st Annual Meeting | |
Thank You For Joining Us! | |
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Thank you to everyone who attended the 61st Annual Meeting last week! The event was a success thanks to our wonderful speakers, sponsors, and volunteers. We are grateful for their participation and continued support.
From the opening remarks given by New Mexico House Minority Leader Ryan Lane to the closing conversation with CEO, Lance Robertson of Endeavor Energy Resources, we hope that each speaker and panel discussion allowed you to take away new insight into current opportunities available to and challenges facing the oil and gas industry.
To view the official event photos from the welcome reception and the meeting, visit our social media pages or check out our website!
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In Memoriam: Mr. Mack C. Chase | |
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We are saddened to learn of the passing of one of PBPA's distinguished Top Hands Mr. Mack Chase.
Mr. Chase, owner, and founder of Mack Energy and Chase Farms, was a man well known for his business acumen as much as he was for his charitable nature and philanthropy. PBPA was honored to recognize him for his contributions to the oil and gas industry, as well as his commitment to Artesia and the state of New Mexico. We have lost a giant and send our condolences to his family and our friends at Mack Energy.
In 2017, when PBPA's Board of Directors awarded Mr. Chase the honor of Top Hand, the Permian Basin Oil and Gas Magazine titled his article "Humility, thy name is..." which could not have been more appropriate. Although his passion was long known and recognized, no award could ever properly honor his immense impact on life. His legacy will live on for generations to come.
This video was prepared for Mack Chase upon his receipt of the Top Hand award in 2017 and illustrates why he was so deserving. Additionally, PBPA also created this video to commemorate the evening.
We hope you take the time to enjoy, honor, and remember this extraordinary Top Hand.
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PFAS in New Mexico
Earlier in the year, environmental groups filed a rulemaking application with the New Mexico Oil Conservation Commission (OCC) focused on the use of perfluoroalkyl and polyfluoroalkyl substances, so-called “forever chemicals” (PFAS), in the oil and gas industry. It is our understanding that while PFAS are used in a wide variety of common applications, from the linings of fast-food boxes and non-stick cookware to fire-fighting foams, they are not a group of synthetic chemicals that are often, if ever, purposefully used in oil and gas operations. For this reason, it is incredibly important that the industry engage on this issue to provide OCC with a clear understanding of PFAS use, or lack thereof, in our operations. For this reason, PBPA is also working with NMOGA and IPANM on this issue.
The OCC held a hearing on July 13 concerning the issue, and the hearing had the sole purpose of whether to hold an additional public hearing on the proposed rule. The trades supported a hearing to be held in the first quarter of 2024. This would allow for proper stakeholder engagement and education of OCC. A hearing on the proposed rule was set by OCC for the week of February 26, 2024.
Since the setting of the February 2024 hearing, OCC has also requested responses to a notice for request of expert witness on PFAS. Through PBPA members, we identified a company to recommend. This company has since submitted a response to the notice of request and we have encouraged OCC to utilize this resource moving forward. We continue to engage on this issue in New Mexico and will keep everyone updated as new information comes available. If you have any questions about this particular issue, please reach out to Stephen (stephen@pbpa.info).
Atencio v. New Mexico
In May 2023, environmental groups, among others, brought a lawsuit against the State of New Mexico, the Governor, the Legislature, and several state agencies, for violating the state’s constitution as it regards provisions providing for a clean environment. If successful, this lawsuit could be devastating to all business activities in the state. PBPA has been consulting with NMOGA, IPANM and other stakeholders regarding the possible need for industry intervention in the suit either directly or in support of other entities.
Recently, in what is hopefully a positive sign for the state’s desire to fight back against this action, the New Mexico Legislature filed a Motion for Judgment on the Pleadings, which if granted would dismiss and end the lawsuit. The Motion argues, among other points, that the plaintiffs’ claims to have such a matter resolved in the courts is a violation of the constitutional doctrine of separation of powers. We expect additional action in this case towards the end of October and will keep everyone updated.
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Proposed Revisions to the New Mexico Oil and Gas Act
In August, word began spreading that the New Mexico Governor would be adding to her call during the upcoming short legislative session (to be held in January and February 2024) proposed revisions to the state’s Oil & Gas Act. Since that time, the New Mexico Oil Conservation Division (OCD) has distributed a list of priority revision topics and has been conducting stakeholder meetings on these topics. The proposed topics include freshwater use, setbacks, financial assurances & civil penalties, well transfer limitations, fee increases, and codifying the 98% gas capture regulation. The meetings include representatives from industry as well as from environmental NGOs. PBPA has been attending and engaging in these meetings as well as coordinating with NMOGA and IPANM on their efforts regarding the same. If you are interested in engaging on this issue, please contact Stephen (stephen@pbpa.info).
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Rule 8/Chapter 4
Members, this week the Railroad Commission of Texas has informally published the amendments to Rule 8 that will be incorporated into the new Chapter 4 (the rules that govern broadly the non-commercial authorized and commercial permitted waste rules). This rule is significant and your input is necessary to ensure that these rules can provide improvements to existing practices that are science-based and practical for industry operators.
PBPA will be holding meetings on these issues to address specific concerns. Please contact Michael@pbpa.info for more information.
At this time, this informal process allows for the public to provide comments no later than 5 PM on November 3, 2023.
Additionally, the RRC will host two meetings:
At 10 AM on Thursday, October 26, 2023, the RRC will hold an in-person hearing in Room 1.111 of the William B. Travis Building, 1701 N. Congress in Austin. For information on visiting the RRC, head to the RRC website at https://www.rrc.texas.gov/about-us/organization-and-activities/visiting-the-railroadcommission/.
At 9 AM on Friday, October 27, 2023, the RRC will hold a virtual hearing using an internet meeting service. Individuals who plan to participate in the hearing by providing verbal comments or who want their participation on record must register by submitting the following information to Paul DuBois at Paul.DuBois@rrc.texas.gov: request to provide verbal comment, name, title, affiliation, and contact information to include email address and daytime telephone number.
We cannot overemphasize the importance of your input. Click on the following links to view the announcement of this rule, the synopsis, and the proposed provisions of Subchapter A and Subchapter B.
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PBPA’s Legal Action regarding the LPC
PBPA continues to pursue our claims that the listing of the lesser prairie chicken (LPC) as endangered in the Permian Basin and threatened throughout the rest of the species’ range under the Endangered Species Act is inappropriate, is unsupportable, and should be revoked. As a reminder, PBPA brought a suit against the Department of Interior on these claims in the Western District of Texas earlier this year. This case is working its way through the court with motions being submitted and ruled upon by the judge. Recently, a scheduling order was established for the case settling deadlines and expectations moving forward.
This action is being managed by PBPA’s Legal Committee. PBPA’s partners in this case include the states of Texas, Kansas, Oklahoma, the counties of Chaves, Eddy, and Roosevelt in New Mexico, the National Cattlemen’s Beef Association, the Kansas Independent Oil & Gas Association, and the Petroleum Alliance of Oklahoma.
If you would like to discuss this case in more detail, please reach out to PBPA staff.
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Proposed GHGRP Revisions Update
Although the U.S. Environmental Protection Agency (EPA) had proposed revisions to their Greenhouse Gas Reporting Program (GHGRP) back in 2022 (on which PBPA engaged EPA directly and provided official comment), with the passage of the Inflation Reduction Act (IRA) and its new methane tax, EPA saw the need to once again propose revisions to the GHGRP in 2023.
If implemented as proposed, EPA’s GHGRP revisions, in conjunction with simultaneous efforts to incorporate elements of the not-yet-final New Source Performance Standards and Emissions Guidelines for Greenhouse Gas Emissions from Existing Crude Oil and Natural Gas Facilities (OOOOb/c) pending rule, will dramatically increase the scope and breadth of activities and number of oil and gas operators that will be subjected to methane emissions reporting requirements.
As a result, the intended effect will be to dramatically increase those operations subject to the charge for emissions above 25,000 metric tons of CO2 or its equivalent as established in the IRA, even with no change in actual emissions. In other words, even though the stated intent of the IRA, according to its author Sen. Joe Manchin (D-WV), was to only impact those operators above 25,000 metric tons of CO2 or its equivalent in emissions on the date of enactment of the IRA, EPA’s proposed GHGRP revisions will move the goal posts in a blatant attempt to burden as many operators, large, medium and small, as possible with the new methane tax with limited environmental benefit.
PBPA established a Working Group of our members and hired outside legal counsel to assist in the review and drafting of our comments on the GHGRP proposal. Those comments were submitted to the EPA earlier this week. Roughly, PBPA’s analysis concludes that if finalized as proposed, EPA’s GHGRP revisions will compel the reporting of unrealistic, inflated emission totals through the disincentivizing use of monitoring technologies and the imposition of unrealistic emission factors. This result not only counters EPA’s express aim of the proposed revisions, but it also would significantly impact PBPA members both in terms of reputation (through unrealistic yet publicly-disclosed emissions data) and finances (through inflating methane fees).
PBPA’s comments further focused on the GHGRP revision’s language on flares, large release events, pneumatics, the distinctions between upstream, midstream, and downstream operations, incentivizing technology to provide empirical data, inconsistencies with this proposal and other regulations, and much more. For additional details on PBPA’s concerns with the proposed GHGRP revisions, you can read PBPA’s comments here, or reach out to discuss the issue with PBPA staff.
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Proposed Listing of the Dunes Sagebrush Lizard Update
Last July, the U.S. Fish and Wildlife Service (Service) again proposed to list the dunes sagebrush lizard (lizard or DSL) as Endangered under the Endangered Species Act (ESA) throughout the Permian Basin as they had done previously in 2012. In 2012, the Service determined to withdraw their listing proposal stating that the conservation efforts in place would protect the lizard and its habitat. Even though conservation efforts continue to help the species and its habitat, to the point that there are net conservation acreage gains for the lizard, the Service has now determined a listing is necessary. A final listing decision will have a devastating impact on the Permian Basin oil and gas industry and wipe away years of successful investment in conservation.
This summer, the Service arbitrarily determined that the DSL is in danger of extinction throughout all of its range. The Service mischaracterizes existing data in an attempt to support its unfounded hypothesis that the DSL is in danger of extinction with respect to the Permian Basin.
According to the Service’s own research, the best available science estimates a population size of more than one million DSLs. In spite of this, the Service arbitrarily concluded that the DSL is “Functionally Extinct” across portions of its range. More than one million! Oh, and for those keeping score at home “Functionally Extinct” is a new determination not defined or provided for under the actual statutory language of the ESA.
The Service is proposing to list the DSL based only on perceived habitat threats without providing any reliable maps identifying where occupied or suitable habitat occurs or where habitat has been degraded. The Service has not provided or disclosed any maps identifying occupied or suitable DSL habitat in connection with the Proposed Rule.
With respect to Texas, the Service improperly disregards the Candidate Conservation Agreement with Assurances (CCAA) developed in 2020 for the DSL. In spite of pending enrollments covering approximately 150,000 acres, the Service refuses to approve these enrollments and claims there is no participation in this Service-approved plan. This pending enrollment area constitutes more than half of all DSL habitat in Texas.
In New Mexico, approximately 85 percent of the DSL range is enrolled in one of several approved conservation agreements. These agreements, which the Service approved in 2012 or before, prohibit new surface occupancy, seismic activity, and linear infrastructure within occupied or suitable lizard dune complexes and delineated shinnery oak corridors.
Additionally, the conservation agreement requires remediation and reclamation of legacy oil and gas facilities, including roads and well pads, and thus addresses one of the Service’s primary bases for listing. To date, 154 roads and well pads have been reclaimed and reseeded under the conservation agreements
Furthermore, 65 percent of occupied DSL habitat in New Mexico is on lands managed by the United States Bureau of Land Management (BLM). In the Service’s 2012 decision to withdraw its 2010 proposed rule to list the DSL, the Service repeatedly found that conservation agreements and BLM’s Resource Management Plan (RMP) eliminated threats to the DSL in New Mexico so that listing was no longer warranted.
One more important factor, the Service has refused to analyze the success of the various conservation efforts under its Process to Evaluate Conservation Efforts or “PECE” process.
These and additional arguments were compiled by PBPA’s Species, Habitat, and Operations companies for the official comments PBPA submitted earlier this week.
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2023 Top Hand Award Recipient | |
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The Permian Basin Petroleum Association is proud to announce our 2023 Top Hand Award Winner. The PBPA Top Hand is the highest award bestowed by the members of the PBPA, and one of the highest honors given to an energy professional in the Permian Basin. Being a Top Hand means that you exemplify all of the best qualities of professional and community service.
Dick Sivalls served two years in the U.S. Army Signal Corp where he achieved the rank of Sergeant before starting his professional career in the oil and gas industry. He has worked for Sivalls, Inc. since 1959 and is currently President and Chief Executive Officer. Sivalls, Inc. designs, manufactures and sells process equipment for the oil, gas, and petrochemical industries. Dick still holds the title of President of Tectrol, Inc. and Control Ventures, Inc. (formerly Control Equipment, Inc.).
Throughout his illustrious career, Dick has been incredibly active in many oil and gas Trade Associations and is Past Chairman of the Permian Basin Petroleum Association. He has also held several elected offices including City Council of Odessa, Mayor Pro-Tem of Odessa, Permian Basin Regional Planning Commission, and is a long-standing Board Member of the Permian Basin International Oil Show
In addition, he has written and published over 40 technical articles and papers on oil and gas production and processing equipment design and taught engineering short courses in gas processing and oil treating at Texas Tech University, the University of Oklahoma, and Texas A&M University. Dick also has the honor of being a member of the Distinguished Graduates Society of the College of Engineering at the University of Oklahoma.
We look forward to honoring Mr. Sivalls at the Permian Basin 2023 Top Hand Award Banquet on January 18, 2024, at the Petroleum Club of Midland. For information on this event, please contact Jamie Ramirez at Jamie@pbpa.info or call (432) 684-6345.
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- Regulatory Practices Committee: October 17, 2023
For more information on these or any of our other committees, please contact Stephen Robertson at stephen@pbpa.info or (432) 684-6345.
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MC PPDC provides quality training programs designed to keep oil and gas industry professionals current in their areas of expertise by offering the latest industry updates, as well as providing timely and pertinent educational opportunities. Click the link below for upcoming classes being offered by the MC PPDC in the coming months.
Customized Training Available! For more information contact Midland College PPDC at (432) 683-2832 or cepetroleumtraining@midland.edu
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Permian Basin International Oil Show
October 17 - 19, 2023
Ector County Coliseum
4201 Andrews Hwy
Odessa, TX
The Permian Basin International Oil Show is a three-day gathering of producers, service companies, investors, and innovators, where ideas are exchanged, friendships are made and deals are born.
A biennial event since the end of World War II, the oil show has grown to represent the very fabric of a great industry. It serves as an international marketplace, where hundreds of booths and exhibitors fill the Ector County Coliseum. Whether an executive, an engineer, a geologist, or an operator in the field, the Permian Basin International Oil Show has something for everyone.
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Permian Road Safety Coalition Luncheon | |
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Thursday, November 2, 2023
Ward County Event Center
1525 E Monahans Pkwy
Monahans, TX
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